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To furlough or not to furlough – how to make tough decisions about staff

Tough decisions in business
Decisions are often the hardest to make when they involve people

Anyone who’s been running a business for long enough will tell you that difficult decisions are par for the course. But the coronavirus crisis means leaders are facing some of the toughest decisions of their lives.

There is no blueprint for whether you should furlough your staff, give out redundancies or just lay people off. The factors which feed into your decisions are complex. It depends what sector you’re in, how much cash you have to fall back on and whether you’ve been able to access government loans or grants.

With additional restrictions imposed across the UK for the month of November, it’s a decision many businesses are having to consider again. But even for those who do decide to use the government’s Coronavirus Job Retention Scheme – which allows employers to recover 80 per cent of workers’ wages – there are more tough decisions round the corner.

The extended scheme is due to run until the end of March 2021, although it is important to note a possible review in January – at this stage, the Government may ask employers to contribute more towards the paying of wages for their employees. The website to submit applications is now open,  and claims can be made from 8am Wednesday 11 November. Claims made for November must be submitted to HMRC by no-later than 14 December 2020. Claims relating to each subsequent month should be submitted by day 14 of the following month, to ensure prompt claims following the end of the month which is the subject of the claim.

However while there’s no single, simple answer for every business, all business leaders can lean on the same logic and process to reach their own conclusion. Here are five resources we think might be useful.

  1. Still not sure about some of the nitty-gritty involved in furloughing?

    The devil is in the detail and, in an ongoing crisis, new detail emerges all the time. It’s hard to feel like you’re in full possession of all the facts. Which staff does furlough apply to? How will sick pay and holiday allowance work? Can I furlough part of my workforce? How do I apply? When do I get the money? Find out answers to these questions and more on our updated FAQs page. You can find a deep-dive guide to the Coronavirus Job Retention Scheme from the Chartered Institute of Personnel.

  2. Want some help working through a complex decision that’s not clear cut?

    Good leaders don’t take big decisions lightly, especially ones that impact their employees so directly. The former US Secretary of State and retired four-star General Colin Powell once said that making a decision with less than 40 per cent of the available information is too risky and likely to lead to a poor decision. Here’s a how-to guide for making tough decisions in business. It’s not furlough-specific, but a tried-and-tested methodology might make things clearer.

  3. Pretty sure what you’re going to do, just need to sanity check it?

    Sometimes when you’re struggling with tough decisions, it’s often because your mind knows one thing is practical while your emotions are invested in a different outcome. A good mentor would tell you to take both into consideration to make the right decision. Use this 15-point checklist to validate your thinking around important decisions, coronavirus-related or otherwise.

  4. Read all the advice but still not sure of all the factors that relate to your business?

    There is a tonne of coronavirus content out there but not all of it will apply to your business, your staff or your situation. We’re always looking for resources that take some of the legwork away for you and help you cut through the clutter. A decision-tree from the CIPD aims to make staff-related decisions more straightforward and flags up all the relevant web resources for more detail. Have a look and see if it can direct your thinking.

  5. Want to hear what other business owners are doing?

    Listen to our growing library of interviews with business owners.

    • Have a look at our three-minute videos where business leaders from a wide variety of sectors and locations explain how they’ve reacted and what their priorities going forward will be.

    • Listen to our ten-minute audio clips covering important themes, such as furloughing staff or pivoting the business. Finally, we’ve been keeping track of the businesses and management teams taking proactive steps to protect operations.

    Have a read of what they’ve been up to and see if there’s some helpful advice you can take away

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